Accessory Distributors Set To Be Hurt By Flight Away From Apple

Retailers and accessory Companies that have benefitted from the lure of Apple products are facing a new dilemma as consumers switch to Android based devices over the once popular standard form fit Apple range of products.

Some accessory companies who have been selling low cost made in China "attach" sound systems are also coming under threat from traditional Hi Fi companies who initially resisted moving into the attach market, but have used the recent CES Show to launch a range of new high quality sound systems designed to work with a new generation of Android and Apple devices.

These companies, unlike brands like iLuv, TDK and Teac, are set to benefit from the brand pedigree associated with their Hi Fi history.

At this year's CES Show in Las Vegas, several accessory company executives admitted a move away from Apple devices which have a set form factor will hurt them due to the difficulty of designing, for what has been described as a "vast" range of Android attach devices, spanning smartphone and tablets.

Android now accounts for over 70% of all smartphones globally (72.4%), versus Apple's 14% in Q3, 2012 according to analysts at research group Gartner.

iLuv MobiOut

Executives from iLuv said the move away from Apple products was a "complex" issue: "We recognise that demand for Apple accessories could slow down. The real issue for us is that with Android devices there is no common form factor. We are currently developing new lines for the Samsung range of Android devices but this is just one vendor. There are so many different Android devices it will be very difficult for any company to get an advantage unless they have a unique design."

When it was put to the iLuv executive that some of their products on show at CES were Chinese copies of successful sound systems already on sale, the executive--who did not want to be named--said "Yes but ours are cheaper" .

Click to enlarge

Original Jawbox rear, iLuv copy in the front.

When ChannelNews pointed out the close resemblance between the highly successful Jawbone Jambox player and the iLuv MobiOut, the executive said "we are not a sound company, we are an accessory company that makes low cost sound products. We now have Bluetooth built into our products and this is what retailers want".

Melissa O'Neil, the Marketing Manager at Force Technology, the distributor of the Jawbone's product range in Australia, said "We became aware at a recent Hong Kong Show that a lot of companies had moved to copy the design of the Jawbone product range. The one thing that they cannot copy is the quality and the prestige that goes with the Jawbone product range".

Geoff Matthews, the CEO of Convoy and a distributor of several successful Hi Fi brands, said "Several companies are now trying to sell knockoffs of premium quality brands. The headphone market is full of cheap made in China headphones and knockoff sound gear. We believe that the consumer is able to pick the difference.

"During the past 12 months we have seen a flight back to quality brands. A quality or known brand is a lot easier to sell than an unknown brand and consumers will pay a little more for the experience. A brand that has been copied lacks credibility or the depth of technology that a premium brand delivers. Some Chinese brands now claim to have Bluetooth but there is varying levels of Bluetooth. We for example are now delivering Full HD Bluetooth sound in our products" he said.

Scott Browning, the Marketing Director at JB Hi Fi, backs up Matthews' claim that there is a flight back to quality brands by consumers. However he is not writing off Apple as a spent force.

"On the accessory front we are going to see two to three dominant form factors emerge. Accessories are going to be a mix of hard and soft and consumers will be the ones who work out which is best for them" Browning said.

"Right now the tide is still out. The non Apple environment has suddenly become very competitive and what we have to deliver is a value proposition. The consumer now has a lot more choice and this often happens when there are supply problems. Quality is a big issue and we are seeing consumers move to quality known brands, especially if the value proposition is right".

Browning said that one of the brands set to be popular in the accessories market is Samsung, with several companies now delivering accessories for the Korean company's range of Galaxy smartphones and tablets.

A Belkin spokesperson said "We recognised early on that there was going to be demand for Samsung products and we have split our accessory offering between Apple and Samsung. Several accessory companies are going to struggle as there is literally hundreds of accessory manufacturers that have sprung up off the back of Apple".

A spokesperson for Samsung said that the Korean Company was looking to expand their own range of Galaxy accessories in Australia with their new store network set to sell accessories direct to consumers.